Opposition Mounts Against Proposed Sale of U.S. Steel to Japanese Multinational Company

Pittsburgh, PA (WorkersCompensation.com) -- A gaggle of union labor leaders, politicians, and political economists are voicing strong opposition to the proposed sale of U.S. Steel, the company founded in 1901 and headquartered in Pittsburgh, Pa., to Nippon Steel.  

“Neither  U.S. Steel nor Nippon reached out to our union regarding the deal, which is in itself a violation of our partnership agreement that requires U.S. Steel to notify us of a change in control of business conditions, ‘’ according to David McCall, international president of the United Steelworkers (USW).

McCall further noted that the USW does not believe that Nippon understands the full breadth of the obligations of all our agreements.  “And we do not know whether it has the capacity to live up to our existing contract. This includes not just the day-to-day commitments of our labor agreement, but also significant obligations to fund pension and retiree insurance benefits that are the most extensive in the domestic steel industry,’’ said McCall.

Pennsylvania’s two Democratic senators, Sens. John Fetterman and Bob Casey, both issued statements voicing concern over the deal. 

Fetterman, who lives across from U.S. Steel’s Edgar Thompson plant in Braddock, Pa. vowed  “to take all possible actions’’ to block the acquisition.

Casey said based on initial reports, “This deal appears to be a bad deal for Pennsylvania and for Pennsylvania workers.’’

Robert Strauss, a political economist at Carnegie Mellon University’s Heinz College, said  the deal could be seen as a threat to American industrial leadership. “The purchaser could be just looking to strip U.S. Steel of its valuable high-quality iron ore resources,’’ Strauss said.

But  U.S. Steel officials argue that the combination of Nippon Steel Corporation and U.S. Steel will create a stronger, more competitive global company, better positioned  to serve all employees and customers. 

Andrew Fulton, U.S. Steel media representative, also issued the following statement from U.S. Steel: “U.S. Steel products will remain mined, melted and made in America, and the company’s headquarters will remain in Pittsburgh, Pa. supporting roughly 3,000 union jobs in the state and 1,000 non-union jobs in western Pennsylvania. Nippon Steel corporation believes that the combined workforce is critical to operations in the United States, and they are committed to partnering with the United Steelworkers (USW) and honoring all collective bargaining agreements.’’

Assuming the deal goes through, by mid-2024, U.S. Steel, long identified with Pittsburgh, will now be owned in Tokyo, and despite assurances from both Nippon Steel and U.S. Steel that Pittsburgh will remain headquarters of U.S. steel as a subsidiary, some worry about  what the future holds for the company in the region.

“Pittsburgh has long been known as the heart of steel producing in America. There could also be concerns about security issues with a foreign company owning an American steelmaker,’’ said Strauss.  The United States is the fourth largest steel producing country in the world.

As more opposition swirls around the security issue, U.S. Senators Josh Hawley (R-Mo.), J.D. Vance (R-O), and Marco Rubio (R-Fla.) sent a letter to Janet Yellen, Secretary of the Treasury and Chair of the Committee on foreign Investment in the United States (CFIUS), urging her to block the sale of U.S. Steel to Japan-based Nippon Steel Corporation because the deal raises national security concerns and threatens to weaken America’s industrial base. 

 “The real concern here is leaving America with scant domestic steel production and a potential loss of jobs in an increasingly competitive global marketplace,’’ added Strauss.  

J.P. Morgan formed U.S. Steel on March 2, 1901 by financing the merger of Andrew Carnegie’s Carnegie Steel Company with Elbert H. Gary’s Federal Steel Company and William Henry “Judge” Moore’s National Steel company for $492 million ($17.3 billion today).

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